4.5% hike for storm damage

Feb. 23, 2013

A number of small transformers sit on JCP&L property being used as a staging site in Lacey after superstom Sandy in November. / BOB VOSSELLER/STAFF PHOTO

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Jersey Central Power & Light wants customers to foot the huge bill for its restoration and rebuilding efforts after superstorm Sandy devastated the utility’s electric infrastructure.

The Morristown-based utility late Friday told the state Board of Public Utilities it would like to recover approximately $603 million of the $630 million it spent on Sandy, including $345 million in capital expenditures and $258 million on other items, including the cost of calling in utility crews from around the country.

Out of power for 11 days after Sandy, Long Branch resident David Gizzi called the rate request a “ripoff.”

“They inflate the prices and the cost of the storm,” Gizzi said. “They could have gotten the work done quicker had they been prepared and gave the people work orders on what to repair.”

Brick resident Mark Crane, who went 17 days without power, said a rate increase is expected.

“I figure the utility companies would seek a rate increase,” he said. “I think before it’s granted, the BPU should hold their feet to the fire and make sure they have better customer relations.”

It’s the second request for a rate increase the utility has filed since Nov. 30. At that time, JCP&L said it wanted to raise electric bills by 1.2 percent to pay for the damage to its system after Tropical Storm Irene and an October snowstorm in 2011.

But it warned that they would add the costs from superstorm Sandy later. And on Friday, JCP&L turned in the bill.

If approved by the BPU, the two requests will hike rates 4.5 percent overall for an average JCP&L residential customer using 650 kilowatt hours of electricity.

The rate request would result in an increase in the average monthly bill from $98.10 to $102.54, or $4.44, for a residential customer using 650 kilowatts of electricity.

The amount would be offset by a recent 3 percent decrease from the wholesale cost of electricity, which takes effect in June.

Superstorm Sandy turned off power to 1.1 million JCP&L customers, including hundreds of thousands at the Jersey Shore.

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The damage in Monmouth and Ocean counties, where more than 469,000 customers lost power, was among the most severe in New Jersey. High winds snapped trees and limbs, cutting power lines. Utility poles splintered like sticks. Transformers popped and sparked. Some substations were flooded.

More than a week later, another 100,000 lost power when a nor’easter dumped heavy snow on the area.

The restoration efforts were the biggest in JCP&L’s history. At its height, the company said about 13,000 people were working to get the lights back on, including about 8,500 linemen, a number augmented by crews from utilities in 17 states as far away as California.

Other costs include cutting and clearing about 65,000 trees and replacing 6,700 utility poles, 19,200 crossarms, 3,600 transformers and 400 miles of wire.

The utility intends to spend more money. In an effort to offset Sandy repair costs, JCP&L said it has identified $2.6 billion in projects for funding from the New Jersey Community Development Block Grant program.

As proposed, a majority of those funds would be targeted on projects to harden the electrical infrastructure and protect it from storms, improving its future reliability, JCP&L said.

The remainder of the grant funding could be used to offset the costs related to JCP&L’s Sandy restoration effort and help reduce customers’ electric bills, the utility said.

In a statement, Paul Flanagan, litigation manager at the state Division of Rate Counsel, said his office has not yet received a copy of JCP&L’s latest filing.

“The Division of Rate Counsel is currently in the process of reviewing the company's earlier rate increase request,” he said. “Once we receive the company's latest request, we will give it a very close review and do all that we can to protect ratepayers.”

Jeff Tittel, director of the New Jersey Sierra Club, said JCP&L is asking customers to pay for its own mistakes from Sandy.

“They should be paying their customers for the power outages and frustrations from JCP&L’s incompetance,” Tittel said in a statement. This is “like the owners of the Titanic asking the survivors for more funding for using their lifeboats.”